Explained: What is confidential IPO filing and why companies opt for it

PhonePe, a Walmart-backed digital payment and financial services provider, is reportedly preparing for its IPO. The company has submitted its draft papers to the Securities and Exchange Board of India (SEBI) through the confidential pre-filing process.

The company is reportedly targeting a fundraise of around ₹12,000 crore through a full offer for sale, according to a report in Moneycontrol.

This raises the question: What exactly is a confidential IPO filing? Essentially, it allows companies to keep sensitive information private until they are ready to officially launch their IPO. Let’s find out more about confidential IPO filing and why companies choose it.

What Is Confidential IPO Filing?

A regular initial public offering (IPO) filing involves a company submitting its draft red herring prospectus (DRHP) to SEBI. This document contains details about the company, such as financials, risks, competition and growth strategies, and is publicly accessible, ensuring transparency for investors.

Confidential IPO filing, introduced by SEBI in December 2022, changes this approach. Companies opting for confidential filing submit their DRHP without making it public. The details become visible only when the company files the red herring prospectus (RHP) and is ready to launch the IPO.

How Does Confidential Filing Work In India?

Usually, a company appoints merchant bankers to evaluate the business and prepare the DRHP. SEBI reviews this document and may request revisions before approving. Once approved, the company files the RHP, which reflects the latest information, to officially start the IPO. With confidential filing, the DRHP remains private during SEBI’s review. Only after the regulator has provided feedback and the company is ready to go live does it make the RHP public.

Why Do Companies Choose Confidential IPO Filing?

The DRHP contains proprietary information, including market strategies and competitive plans. Confidential filing ensures that such details remain private, preventing competitors from accessing them prematurely.

Not all companies that file a DRHP proceed with a public offering. Confidential filing helps protect the company’s reputation and strategic plans in case the IPO is later cancelled.

Filing confidentially also allows companies to address SEBI’s queries and concerns before the information becomes public. This helps streamline compliance and reduces the risk of last-minute regulatory issues.

Additionally, confidential IPO filing provides companies with extra time to meet regulatory requirements, such as ensuring minimum promoter contributions, before the IPO details are officially disclosed.

Which Companies In India Have Opted For Confidential IPO Filing?

According to a report in Fortune, till the first half of 2025, 16 companies in India had chosen the confidential pre-filing route for their IPOs. These include Tata Play, Meesho, Groww, Boat, Physicswallah, Oravel Stays, Swiggy, Vishal Mega Mart, Tata Capital, Shiprocket, Aequs, Gaja Alternative Asset Management, Jay Jagdamba, Manipal Payment & Identity Solutions, Shadowfax Technologies and Steamhouse India.

Are There Drawbacks Of Confidential IPO filings?

Confidential IPO filings come with certain drawbacks for companies and investors. For companies, the process can be more time-consuming and expensive due to higher legal and advisory fees. Also, some confidentially filed DRHPs may never progress to a public IPO.

For investors, delayed access to information limits the time available to review and make informed decisions.